CLA-2 CO:R:C:M 951866 NLP
District Director
United States Customs Service
40 South Gay Street
Baltimore, MD 21202
RE: Protest No. 1303-92-100061; tumbled semi-precious gemstones;
semi-precious gemstones that are otherwise worked than
simply sawn or roughly shaped; subheading 7103.10.40;
Explanatory Note 71.03; Gem Cutting: A Lapidary's Manual
Dear Sir:
The following is our decision regarding the Protest and
Request for Further Review No. 1303-92-100061, dated March 12,
1992. At issue is the classification of tumbled semi-precious
gemstones under the Harmonized Tariff Schedule of the United
States (HTSUS).
FACTS:
The articles at issue are the following semi-precious
gemstones: banded amethyst, rose quartz, leopard skin, jasper and
rock crystal B. The rough gemstones are shoveled into 2-1/5 ton
tumblers with abrasives and water. The tumblers are turned over
and over and the stones slide and rub against each other for many
weeks until they are perfectly smooth. Tumbling gives the stones
a slick and shiny surface. Upon importation, the gemstones are
not set. Once imported, the stones will be used to manufacture
various articles of jewelry such as, bracelets, necklaces and
earrings.
Upon liquidation, the semi-precious gemstones were
classified in subheading 7103.10.40, HTSUS, which provides for
"[p]recious stones (other than diamonds) and semi-precious
stones, whether or not worked or graded but not strung, mounted
or set; ungraded precious stones (other than diamonds) and semi-
precious stones, temporarily strung for convenience of transport:
[u]nworked or simply sawn or roughly shaped: [o]ther." The rate
of duty for articles that fall within this subheading is 21% ad
valorem.
The protestant contends that the semi-precious gemstones
are classified in subheading 7103.99.10, HTSUS, which provides
for "[p]recious stones (other than diamonds) and semi-precious
stones, whether or not worked or graded but not strung, mounted
or set; ungraded precious stones (other than diamonds) and semi-
precious stones, temporarily strung for convenience of transport:
[o]therwise worked: [o]ther: [c]ut but not set, and suitable for
use in the manufacture of jewelry." The rate of duty for
articles that fall within this subheading is 2.1% ad valorem.
ISSUE:
Are the tumbled semi-precious gemstones classified as
"roughly shaped" in subheading 7103.10.40, HTSUS, or as stones
that are "otherwise worked" in subheading 7103.99.10, HTSUS?
LAW AND ANALYSIS:
The classification of merchandise under the HTSUS is
governed by the General Rules of Interpretation (GRI's). GRI 1
provides that classification shall be determined according to the
terms of the headings and any relative section or chapter notes.
Heading 7103, HTSUS, provides for "[p]recious stones (other
than diamonds) and semi-precious stones, whether or not worked or
graded but not strung, mounted or set; ungraded precious stones
(other than diamonds) and semi-precious stones, temporarily
strung for convenience of transport." Explanatory Note (EN)
71.03 of the Harmonized Commodity Description and Coding System,
page 953, states that "[t]he provisions of the second paragraph
of the Explanatory Note to heading 71.02 apply, mutatis mutandis,
to this heading." EN 71.02 states on page 952 that heading 7102,
HTSUS, "covers unworked stones, and stones worked, e.g., by
cleaving, sawing, bruting, faceting, grinding, polishing,
drilling, engraving (including cameos, and intaglios), preparing
as doublets, provided they are neither set nor mounted."
Unworked semi-precious stones of subheading 7103.10.20,
HTSUS, are stones that are unworked and are in the same condition
as when they were mined from the earth. The "other" semi-
precious stones of subheading 7103.10.40, HTSUS, are stones that
have been "simply sawn or roughly shaped". Articles that have
been further worked than simply sawn or roughly shaped are
classified in subheading 7103.99, HTSUS.
The protestant argues that tumbled semi-precious gemstones
are considered cut stones and are more than "roughly shaped". In
addition, the stones are not set and in their condition as
imported they are suitable for the manufacture of jewelry items
such as bracelets, earrings and necklaces. Therefore, these
stones are considered "otherwise worked" and they should be
classified in subheading 7103.99.10, HTSUS.
Tumbling is a method of mass producing gems by placing rough
pieces of gem material in a barrel, adding abrasives and water,
and turning the barrel over and over until the stones are
perfectly smooth. As a result of this process, the gemstones are
cut into different shapes and are suitable for use in the
manufacture of jewelry. See, Gem Cutting: A Lapidary's Manual,
by John Sinkarkas, 2nd Ed. 1962, Van Nostrand Reinhold Company,
p. 187. It is our position that gemstones that are shaped by
tumbling are more than "roughly shaped" and would be considered
"otherwise worked" for HTSUS purposes. As the subject semi-
precious gemstones are tumbled, not set and suitable for use in
the manufacture of jewelry, they would be classified in
subheading 7103.99.10, HTSUS.
HOLDING:
The protest should be allowed in full. A copy of this
decision should be attached to the Customs Form 19 and provided
to the protestant as part of the notice of action on the protest.
Sincerely,
John Durant, Director
Commercial Rulings Division